TIDMESNT
RNS Number : 6686V
Essentra plc
16 April 2021
ESSENTRA PLC
A leading global provider of essential components and
solutions
Q1 2021 TRADING UPDATE
Summary
-- Well positioned to rebound from Covid-19 ("the pandemic"),
focused on delivering organic growth, cost reduction initiatives
and accretive M&A
-- Continued positive momentum resulted in Q1 2021 revenue being
up by 1.4% on prior year, on a like-for-like (LFL) (1) basis
-- Components returned to growth with revenue up by c.5% (2)
-- Packaging had a quiet January, trading improved in the
remainder of the quarter where it was level year-on-year. Cost
actions have continued to support margin improvement
-- Filters had a strong start to the year, delivering revenue growth of 10%
Essentra plc ("the Group" or "the Company") today announces its
trading update for the three month period to the end of March
2021.
Current trading and outlook
An encouraging start to the year with Q1 2021 trading in line
with expectations, notwithstanding logistical challenges derived
from the pandemic and the aftermath of Brexit. The Company
delivered LFL revenue growth of 1.4% for the period - marking a
return to positive quarterly growth and continuing the trend of
improved quarterly performance momentum seen since the onset of the
pandemic in Q2 last year. Although the pandemic continues to
contribute to an uncertain macro-economic environment, recent order
book trends are improving across the Group.
The Components division delivered a robust performance in Q1
2021, with revenue growth of c.5%, adjusting for two less trading
days during Q1 2021 (reported growth of 2.4%), as end markets
continued to improve and our commercial initiatives delivered
benefit - our enhanced online offer has continued to differentiate
us and we are starting to reap the rewards of our recently
introduced 'category management' approach. It is noteworthy that
the growth in Components has been delivered despite supply chain
challenges - including Brexit which is improving. We continue to
expect a positive trend in LFL revenue growth for the remainder of
the year, based on recent order book data.
The Packaging division had a LFL revenue decline of 5.4%
(reported +4.3%) owing to a reduction in the level of prescriptions
and elective surgeries through lockdown periods (as seen since H2
2020). Despite a quiet January (driven by a slow start to the year
for many of our customers), trading improved in the remainder of
the quarter where it was level year-on-year. The integration of 3C!
continues to progress well and is in line with our expectations.
Cost actions continue to support margin improvement, paving the way
of our journey to reach a 2021 margin exit rate in line with the
industry average of 8-10% (barring any major unforeseen
macro-economic events). Recent order book trends have been
improving and we continue to believe the market will return to
moderate growth in the second half of 2021 as global healthcare
systems catch up on the significant backlog of prescriptions and
elective surgeries.
The Filters division had a strong start to the year, with
revenue growth of 10.0%. The strong performance has mainly been
driven by outsourcing contracts delivering volumes in line with
expectations. In terms of progress with the division's other 'game
changers':
-- The China JV remains on track to commence production towards the end of Q2 2021; and
-- The division's innovation capability continues to deliver,
and as previously reported, we have recently launched three
proprietary eco-products (3) , which are intended to meet the EU's
Single Use Plastics Directive initiatives for plastic-free and
biodegradable products. Although it is still early stages, we are
pleased with the ever-increasing interest the market is showing
towards these new products, with several projects already
underway.
Filters' revenue is expected to continue growing, but the growth
rate may moderate as the comparatives become tougher.
Commenting on today's results, Paul Forman, Chief Executive,
said:
"I am extremely pleased with the positive start to the year that
we have had. The diverse nature of our businesses' end markets
provides a degree of resilience against the macro uncertainty
caused by the pandemic, but nonetheless it very encouraging to see
that we have maintained the momentum of improving quarterly
performance, resulting in overall LFL growth of 1.4%. Across the
businesses, recent order book trends are improving, and I expect
this positive momentum to be maintained."
Annual General Meeting
The Company is due to hold its 2021 Annual General Meeting
("AGM") at 12:00 noon on Thursday 20 May 2021.
Notes
(1) Excludes the impact of acquisitions, disposals and foreign
exchange
(2) Adjusting for two less trading days during Q1 2021
(3) ECO Sensation, ECO Cavitec and ECO Cavitec Sensation
Enquiries
Essentra plc Tulchan Communications LLP
Aamir Mohiuddin, Investor Relations Martin Robinson
Director Olivia Peters
Lucy Yank, Group Communications Tel: +44 (0)20 7353 4200
Director
Tel: +44 (0)1908 359100
Notes to Editors
About Essentra plc
Essentra plc is a FTSE 250 company and a leading global provider
of essential components and solutions. Organised into three global
divisions, Essentra focuses on the light manufacture and
distribution of high volume, enabling components which serve
customers in a wide variety of end-markets and geographies.
Headquartered in the United Kingdom, Essentra's global network
extends to 34 countries and includes 7,065 employees, 50 principal
manufacturing facilities, 32 sales & distribution operations
and 3 research & development centres. For further information,
please visit www.essentraplc.com .
Essentra Components
Essentra Components is a global market leading manufacturer and
distributor of plastic injection moulded, vinyl dip moulded and
metal items. Operating in 25 countries worldwide, 15 manufacturing
facilities and 25 sales & distribution centres serve more than
82,000 customers with a rapid supply of low cost but essential
products for a variety of applications in industries such as
equipment manufacturing, automotive, fabrication, electronics and
construction. The division also includes the Reid Supply business,
which provides a wide range of branded hardware supplies to a broad
base of industrial customers, largely located in the US
Mid-West.
Essentra Packaging
Essentra Packaging is one of only two multicontinental suppliers
of a full secondary packaging range to the health and personal care
sectors, with 25 facilities across three geographic regions. The
division's innovative products include cartons, leaflets,
self-adhesive labels and printed foils used in blister packs, which
help customers to meet the rapidly-changing requirements of these
end-markets and can also be combined with Essentra's authentication
solutions to help the fight against counterfeiting.
Essentra Filters
Essentra Filters is the only global independent cigarette filter
supplier. The twelve sites across nine countries, including three
R&D centres, provide a flexible infrastructure strategically
positioned to serve the tobacco sector. The business supplies a
wide range of value-adding high quality innovative filters,
packaging solutions to the roll your own segment and analytical
laboratory services for ingredient measurement to the industry:
Essentra's offering also includes Heat Not Burn and e-cigarette
solutions to the rapidly evolving market for Next Generation
Products. The division also includes the Tear Tapes business, which
is globally recognised as the leading manufacturer and supplier of
pressure-sensitive tear tapes, that are largely used in the
tobacco, food and drink and specialist packaging.
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END
TSTUVVURABUSAUR
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